NEW YORK--(BUSINESS WIRE)--TPG RE Finance Trust, Inc. (NYSE: TRTX) ("TRTX†or the "Company†) announced today that it closed TRTX 2025-FL7, a $1.1 billion managed Commercial Real Estate Collateralized Loan Obligation ("CRE CLO†). The Company placed approximately $957.0 million of investment grade securities with institutional investors providing term financing on a non-mark-to- market, non-recourse basis. TRTX 2025-FL7 includes a 30-month reinvestment period, an advance rate of 87.0%, and a weigh. ...

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Core Insights - TPG RE Finance Trust (TRTX) is currently trading at a significant double-digit discount to its book value per share, indicating potential undervaluation in the market [1] - The preferred shares of TRTX are offering elevated yields compared to their levels from a year ago, suggesting an attractive income opportunity for investors [1] - The Federal Reserve is anticipated to further cut interest rates, which may positively impact the performance of REITs and other income-generating assets [1] Company Focus - Pacifica Yield is focused on long-term wealth creation by targeting undervalued yet high-growth companies, high-dividend stocks, REITs, and firms in the green energy sector [1]

Core Insights - TPG RE Finance Trust (TRTX) is currently trading at a significant double-digit discount to its book value per share, indicating potential undervaluation in the market [1] - The preferred shares of TRTX are offering elevated yields compared to their levels from a year ago, suggesting an attractive income opportunity for investors [1] - The Federal Reserve is anticipated to further cut interest rates, which may positively impact the performance of REITs and other income-generating assets [1] Company Focus - Pacifica Yield is focused on long-term wealth creation by targeting undervalued yet high-growth companies, high-dividend stocks, REITs, and firms in the green energy sector [1]

Financial Data and Key Metrics Changes - TRTX reported GAAP net income of $18.4 million, or $0.23 per common share, and distributable earnings of $19.9 million, or $0.25 per common share, covering the quarterly dividend of $0.24 per common share [13] - Book value per common share increased from $11.20 to $11.25 due to the share repurchase program and solid operating results [13] - Year-over-year, the loan portfolio grew by $1.2 billion, or 12% net [10][16] Business Line Data and Key Metrics Changes - In Q3, TRTX originated four loans with total commitments of $279.2 million at a weighted average credit spread of 3.22% [14] - Loan repayments totaled $415.8 million, including six full loan repayments of $405.8 million, primarily from multifamily and hotel loans originated in 2021 and 2022 [14] - The company repurchased 3.2 million shares of common stock at a weighted average price of $7.89 per share, resulting in $0.13 per share of book value accretion [15] Market Data and Key Metrics Changes - The equity market reached multiple all-time highs, while the 10-year Treasury rallied nearly 40 basis points to hover near 4% [8] - The real estate equity market is healing, driven by reset valuations and reduced lending appetite from the banking sector [8] Company Strategy and Development Direction - TRTX's investment activity accelerated, closing $279 million of new investments in Q3 and expecting over $670 million of loans to close in Q4 [8][9] - The company continues to lend primarily on multifamily and industrial assets, which represent approximately 91% of the $1.1 billion of closed and in-process investments [9] - TRTX shares currently trade at a 20% discount to book value, which the company believes offers substantial value [11] Management's Comments on Operating Environment and Future Outlook - Management expects an increase in demand for their products as interest rates stabilize and potentially decrease [22][23] - The company anticipates a more balanced mix of acquisition and refinance activity in the coming year [23] - The current pipeline is predominantly refinance-focused, but management expects a shift towards more acquisition activity [23] Other Important Information - Bob Foley, the CFO, announced his retirement at year-end after over 12 years with TPG and 10 years as CFO of TRTX [3][4] - Brandon Fox has assumed the role of Interim CFO, and Ryan Roberto has taken on duties regarding capital markets and portfolio management [4] Q&A Session Summary Question: Organic portfolio growth potential with current capital base - Management believes there is potential for organic portfolio growth with the current capital base [19][20] Question: Demand for bridge loan products with potential rate cuts - Management is already seeing acceleration in investment activity and expects increased demand for bridge loans as interest rates stabilize [22] Question: Cadence of leverage increase with new CLO and origination volumes - Management indicated that leverage will likely increase as new investments close, but there may be a lag in earnings from new investment activity [28][29] Question: Unique opportunity in Nashville hotel loan despite reduced exposure - Management clarified that the Nashville hotel loan was a unique opportunity with a high-quality asset and borrower, despite a general reduction in hospitality exposure [30][31] Question: Enhancing ROE through REO portfolio management - Management stated that net balance sheet growth is the most important driver for enhancing ROE, rather than focusing on REO dispositions [35]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported GAAP net income of $18.4 million, or $0.23 per common share, and distributable earnings of $19.9 million, or $0.25 per common share, covering the quarterly dividend of $0.24 per common share [12] - Book value per common share increased to $11.25 from $11.20 due to the share repurchase program and solid operating results [12][14] - Year-over-year, the loan portfolio grew by $1.2 billion, or 12% net [10][16] Business Line Data and Key Metrics Changes - The company originated four loans with total commitments of $279.2 million at a weighted average credit spread of 3.22% during the third quarter [13] - Loan repayments totaled $415.8 million, including six full loan repayments of $405.8 million, primarily from multifamily and hotel loans originated in 2021 and 2022 [13][16] - The company repurchased 3.2 million shares of common stock at a weighted average price of $7.89 per share, resulting in $0.13 per share of book value accretion [15] Market Data and Key Metrics Changes - The real estate equity market continues to heal, driven by reset valuations and reduced lending appetite from the banking sector [8] - The company closed $279 million of new investments during the quarter and expects to close over $670 million of loans in Q4 [8][9] - The weighted average risk rating for the loan portfolio remains at 3.0, consistent with the prior seven quarters [16] Company Strategy and Development Direction - The company aims to continue growth through a disciplined approach to capital allocation and asset management, with a focus on multifamily and industrial assets, which represent approximately 91% of closed and in-process investments [9][10] - The company is leveraging its integrated real estate platform to create value for shareholders, with shares currently trading at a 20% discount to book value [11] - The company plans to enhance its liability structure with the recent pricing of a $1.1 billion CRE/CLO, which will provide substantial liquidity for new loan investments [10][15] Management's Comments on Operating Environment and Future Outlook - Management noted that the backdrop for real estate credit remains attractive, driven by a combination of market dynamics and the company's stable credit profile [8] - The company expects an increase in demand for its products as interest rates potentially decrease, which could lead to more acquisition activity in the real estate sector [22][23] - Management emphasized the importance of net balance sheet growth as the primary driver for enhancing return on equity [35] Other Important Information - The company ended the quarter with near-term liquidity of $216.4 million, consisting of cash on hand and undrawn capacity under secured financing arrangements [16] - The company's liability structure is 87% non-mark-to-market, reflecting a preference for stable, long-dated, and low-cost liabilities [17] Q&A Session Summary Question: Is there organic portfolio growth available with the current capital base? - Management believes there is potential for organic growth in the portfolio as the balance sheet is currently constructed [20] Question: Is there CRE equity money waiting for a more attractive rate environment? - Management is already seeing some acceleration in investment activity and expects demand to increase with lower SOFR rates and reduced interest rate volatility [22][23] Question: How do you see the cadence of leverage as we head into 2026? - Management indicated that there is a lag in earnings from new investments due to the timing of loan repayments and new investments [29] Question: What went into the decision to lend on a Nashville hotel despite reducing exposure to hospitality? - Management stated it was a unique opportunity to lend on a high-quality asset to a high-quality borrower, which provided a good return on equity [31] Question: Is enhancing ROE a function of taking down the REO portfolio? - Management clarified that net balance sheet growth is the most important driver for enhancing ROE, rather than focusing on REO dispositions [35]

Core Insights - TPG RE Finance Trust reported quarterly earnings of $0.25 per share, missing the Zacks Consensus Estimate of $0.26 per share, and down from $0.28 per share a year ago, indicating an earnings surprise of -3.85% [1] - The company posted revenues of $37.84 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 2.66%, and up from $29.28 million year-over-year [2] - TPG RE Finance Trust has not surpassed consensus EPS or revenue estimates over the last four quarters [2] Earnings Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [3] - The current consensus EPS estimate for the upcoming quarter is $0.28 on revenues of $39.06 million, and for the current fiscal year, it is $1.01 on revenues of $151.17 million [7] Industry Context - The Real Estate - Operations industry, to which TPG RE Finance Trust belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Viewpoint - TPG RE Finance Trust, Inc. reported strong third-quarter results, highlighting continued investment momentum and a robust loan pipeline that is expected to drive future growth in earnings [2][3]. Financial Performance - The company recognized GAAP net income of $18.4 million, or $0.23 per common share, for the third quarter of 2025, with a book value per common share of $11.25, up from $11.20 at the end of the previous quarter [3]. - Distributable Earnings for the quarter were $19.9 million, or $0.25 per common share [3]. - A cash dividend of $0.24 per share was declared and paid to common stockholders, with preferred stockholders receiving a quarterly dividend of $0.3906 per share [3]. Share Repurchase and Capital Management - The company repurchased 1,117,024 shares of common stock for a total of $9.3 million, increasing book value per common share by $0.04 [3]. - A new share repurchase program was approved, allowing for the repurchase of up to $25.0 million of common stock [3]. Loan Activity - In the third quarter, the company originated $279.2 million in total loan commitments, maintaining a loan portfolio that is 100% performing [2][3]. - The weighted average interest rate for newly originated loans was Term SOFR plus 3.22%, with a loan-to-value ratio of 64.9% [3]. - Loan repayments totaled $415.8 million, with the majority coming from multifamily and hotel properties [3]. Liquidity and Financial Position - The company ended the quarter with $216.4 million in near-term liquidity, including $77.2 million in cash available for investment [3]. - An allowance for credit losses was recorded at $66.1 million, a decrease from the previous quarter [3]. Subsequent Events - The company closed three first mortgage loans with total commitments of $196.5 million and announced the pricing of a $1.1 billion managed Commercial Real Estate Collateralized Loan Obligation [11].

Financial Performance - Net income attributable to common stockholders for Q3 2025 is $18.4 million, translating to $0.23 per diluted share[9] - Distributable earnings for Q3 2025 amount to $19.9 million, or $0.25 per diluted share[9] - Net income for Q3 2025 was $21,993,000, an increase from $20,631,000 in Q2 2025, representing a growth of 6.6%[59] - Net income attributable to common stockholders for Q3 2025 was $18,449,000, up from $16,881,000 in Q2 2025, reflecting a 9.3% increase[59] - Net income attributable to common stockholders for the nine months ended September 30, 2025, was $45,290, a decrease of 14.2% from $52,757 in the same period of 2024[64] - Earnings per common share (basic) for Q3 2025 remained stable at $0.23, unchanged from Q3 2024[64] Loan Portfolio - Total loan investment portfolio stands at $3.7 billion with an average loan size of $79.7 million[7] - Total loan commitments reached $3.7 billion, with an outstanding principal balance of $3.6 billion[16] - In Q3 2025, total loan originations amounted to $279.2 million, with a weighted average interest rate of Term SOFR + 3.22% and an as-is LTV of 64.9%[28] - The company reported total loan repayments of $415.8 million in Q3 2025, including full repayments of $405.8 million[28] - Loans held for investment increased to $3,631,216,000 in Q3 2025 from $3,278,588,000 in December 2024, indicating a rise of 10.7%[62] - The company’s loan portfolio is concentrated, with 52.6% in the top 25 MSAs and 30.8% in the top 10 MSAs[16] Income and Expenses - Interest income for the quarter is reported at $77.1 million, while interest expense is $48.8 million, resulting in a net interest income of $28.3 million[9] - Net interest income for Q3 2025 was $28,288, a decrease of 3.4% from $29,282 in Q3 2024[63] - Total other revenue for Q3 2025 was $9,553, down 12.0% from $10,863 in Q3 2024[63] Dividends and Shareholder Returns - The company declared a common stock dividend of $0.24 for Q3 2025, with an annualized dividend yield of 8.5% based on the September 30, 2025 closing share price of $8.56[7] - Dividends declared per common share for the nine months ended September 30, 2025, were $0.72, consistent with the same period in 2024[64] Financial Ratios and Metrics - The debt-to-equity ratio is reported at 2.64x, indicating a stable leverage position[13] - The weighted average cost of funds is 3.36%, with a weighted average all-in yield of 7.75%[7] - The weighted average all-in yield on the loan portfolio is 7.75%, with a weighted average credit spread of 3.36%[16] - The CECL reserve at the end of Q3 2025 was $66.1 million, a decrease of $2.6 million from the previous quarter[39] - The allowance for credit losses was $64,544,000 as of September 30, 2025, compared to $61,558,000 at the end of 2024, showing a slight increase of 4.8%[62] - Total stockholders' equity as of September 30, 2025, was $1,082,530,000, down from $1,114,041,000 at the end of 2024, a decrease of 2.8%[62] Risk Management - The company evaluates loan risks quarterly, assigning ratings from 1 (Very Low Risk) to 5 (Default/Loss Likely) based on various factors including loan structure and market conditions[75] - The company focuses on maintaining or improving current operating cash flow through its loan structures[74] - The company’s loans are generally rated "3" (Medium Risk) upon origination or acquisition, unless specific circumstances warrant a different rating[75] Liquidity and Financing - The company has available liquidity of $216.4 million, which includes cash and undrawn capacity[13] - The total financing capacity is $4.6 billion, with 87% being non-mark-to-market financing[43] Real Estate Portfolio - The real estate owned portfolio has a total acquisition date fair value of $247.9 million and a current carrying value of $236.4 million[47] - The classification of mixed-use properties requires that no single use represents more than 60% of the property's total value[75]